Member business lending: credit unions need to seize the moment
MADISON, Wis. - Credit unions are at a crossroads in business lending and face an opportunity as well as a risk. Will they seize the opportunity to offer business credit to their members or walk away from it and hand the market over to banks and investment houses? The latter choice, says one expert, will "portend an erosion of financial strength over the long term" for CUs. In his three-part book , "Member Business Lending: The New Frontier," published by CUES, Craig Uffman, president/CEO of The Uffman Group, L.L.C. takes credit unions through the steps to develop strategies so they can leverage the business lending opportunity for their members. "After decades of neglect, the demographics and financial characteristics of the sector - and the advent of technology that makes servicing it profitable - have made small business the darling of the industry," he writes. "The size and growth rate of the segment, and the tantalizing prospect of much more lucrative relationships relative to the consumer sector, is the context in which the battle lines are forming in an all-out battle for the wallet of the small business owner," he states. Uffman takes CUs through: business lending as an engine for growth; creating a vision for member business lending at your credit union; and winning with structure and strategy. "Credit unions have been involved with business lending for many years, but it's been mostly an informal, unorganized effort," Uffman said. He estimated that less than 30 credit unions have formal member business lending strategies. Credit unions have the extraordinary opportunity to steal that opportunity if they can come together and leverage their natural advantages. They'll be able to achieve economies of scale and dominate the micro business lending market."